Regulatory uncertainty: A false explanation for our jobs crisis
After being sidelined in policy debates for far too long, America’s jobs crisis is finally at the center of discourse. In Regulatory uncertainty: A phony explanation for our jobs problem, EPI President Lawrence Misheljuxtaposes the two prevailing explanations for the country’s jobs crisis. The evidence-based explanation pinpoints the country’s depressed demand for goods and services because of the bursting of the housing and stock market bubbles. The other story, mainly espoused by Republican politicians and business trade associations, purports that business investment and hiring is being held back by uncertainty over future regulations and taxation.
The report examines what employers are actually doing and saying in private surveys regarding investments and hiring. As it turns out, neither their actions nor their privately surveyed statements support conservatives’ “uncertainty” narrative. Mishel notes that not only is the term “uncertainty” a misnomer, as the regulatory process is moving along and the rules are becoming final and therefore certain, but also that it is not even true that regulations cause job losses.
A comparison of investment and private-sector job growth between this recovery and the most recent recoveries suggests that future regulations and taxes are not the problem, as investment in the current recovery has increased more than it had at the same time period in the prior two recoveries and roughly the same as it did during the 1980s recovery. What differentiates this recovery is actually the loss of public-sector jobs. Finally, when the National Federation of Independent Business asked “what is the single most important problem your business faces?” the most common response was “poor sales.” Surveyed businesses do also report a high level of concern over regulation and taxation, but not more so than they did under Presidents Reagan, Clinton, or either of the Bushes.
Mishel’s paper is getting significant media coverage, particularly amongst noted economic columnists and bloggers, including the New York Times’ Paul Krugman, Washington Post’s Greg Sargent and Ezra Klein, Slate‘s David Weigel, Brad DeLong, and the Center on Budget and Policy Priorities’ Jared Bernstein.
- In his New York Times’ blog, Paul Krugman wrote:
“Larry Mishel has a very good piece systematically debunking the zombie claim that fears of regulation are holding back job creation. There is, literally, not a shred of evidence for this claim — not in the numbers, not in what businesses say. Yet it has been eagerly adopted not just by Republican politicians but by Chicago economists, Federal Reserve presidents, and more.”
Krugman discussed the issue further in his column, “Phony Fear Factor.”
- The Washington Post’s Greg Sargent said: “Lawrence Mishel offers the most thorough takedown yet of the conservative idea that regulatory uncertainty is behind our economic problems.”
- Slate’s David Weigel praised the paper calling it “an important, useful report out about the Republican argument that ‘regulatory uncertainty’ is depressing growth and investment.”
- And from Jared Bernstein’s On the Economy: “Larry Mishel, president of the Economic Policy Institute, has an extremely useful piece up collecting all the reasons — with evidence — why the conservatives’ ‘uncertainty’ talking point is shovel-ready nonsense.”
White-collar unemployment is double its pre-recession level for almost 2.5 years
The nation’s persistent high unemployment and stagnant recovery has impacted Americans of all demographics and skill levels.
This week’s Economic Snapshot shows that the unemployment rate among white-collar workers has been 6 percent or higher for 29 consecutive months, double its pre-recession level of 3 percent in December 2007. The only other time since 1973 that white-collar unemployment reached 6 percent was a six-month period from November 1982 through April 1983. This persistent high unemployment among white-collar workers runs counter to the claim some make that our high unemployment is primarily “structural,” a false notion that there are plentiful job openings but an inadequate supply of workers with the right skills to fill them.
EPI in the News
In the past week, EPI’s experts have been cited in over 800 television, radio, and print media outlets. In addition to those noted above, some of the highlights include:
In the New York Times article “A Tryout Program for the Unemployed,” EPI Vice President Ross Eisenbrey questioned recent talks to expand the Georgia Works program throughout the nation. “’It doesn’t take much to create a situation where employers’ expectations about what they have to pay really diminish and employee expectations about what their employers should give them just go into the toilet,’ Mr. Eisenbrey said.”
EPI Director of Trade and Manufacturing Policy Research Robert Scott‘s recent report on the growing U.S. trade deficit with China and his work on the proposed U.S.-Colombia trade agreement were covered by a number of media outlets including:
- The New York Times opinion columnist Joe Nocera cited Scott’s work in his analysis of the trade agreement.
- The Atlantic used the data to create an interactive graphic depicting the states that lost the most jobs.
- The Washington Post‘s opinion writer Harold Meyerson referenced Scott’s work and said “the consequences” of U.S.-China trade agreement “can no longer be denied.”
- AFL-CIO President Richard Trumka cited Scott’s work on the proposed U.S.-Columbia trade agreement in a letter to President Obama urging him to reconsider and was subsequently covered in The Hill.
EPI labor economist Heidi Shierholz discussed the decline in average work hours with Huffington Post reporter Dave Jamieson. Shierholz said: “This hours problem is a big one… we’re not seeing employment growth, and we still have all these workers who haven’t had their hours restored.”